Crypto Tax News
Germany moves to end the one-year crypto rule: what the draft bill actually says
The headline is that Germany wants to kill the one-year tax-free holding period. The provision that will actually cost people money is quieter: if your exchange cannot see what you paid for a coin, the draft lets it withhold tax on half your gross sale proceeds and assume you bought the coin after 2026.
The part that should worry you is not the 25 percent
Most of the coverage of the German Finance Ministry draft has led with the end of the one-year tax-free holding period, or with a flat 25 percent rate. Those are real, and they are below. But the provision that will actually take money out of German investors’ accounts, and the one that is hardest to undo after the fact, concerns proof of purchase. Under the draft, when a German platform sells crypto for you and does not know what you paid for it or when you bought it, it does not simply guess. It assumes the coin was acquired after 31 December 2026, which puts it in the new taxable regime, and it calculates the tax deduction on 50 percent of the gross sale proceeds. That figure has nothing to do with your actual gain. If you moved coins onto a German exchange from a hardware wallet, that is your situation by default.
What the draft changes
Today, private crypto disposals in Germany sit in Paragraph 23 EStG, the rules for private sale transactions. Gains are added to your ordinary income and taxed at your personal progressive rate, and a coin held for more than one year is free of tax entirely. The draft moves crypto out of that regime and into Paragraph 20 EStG, the capital income regime that already covers shares and bonds. The rate becomes the flat Abgeltungsteuer of 25 percent under Paragraph 32d Abs. 1 EStG, plus the 5.5 percent solidarity surcharge levied on the tax itself, which works out to an effective 26.375 percent before any church tax. Holding period stops mattering. The draft uses a new statutory term, Tauschkryptowerte, defined as a crypto-asset under MiCAR that is accepted as a means of exchange and is not issued by a central bank or public authority. Bitcoin and Ether are the named examples.
For some people this is a tax cut
It is worth being honest about who loses and who gains. Germany’s top personal income tax rate is well above 25 percent, so an active trader who has never been able to reach the one-year mark, and who has therefore been paying progressive rates on every disposal, would pay less under a flat 26.375 percent. The people who lose are long-term holders, who currently pay nothing at all after twelve months and would pay 26.375 percent on coins bought from 2027 onward however long they sit on them.
31 December 2026 is the line that matters
The draft does not apply retroactively. Crypto acquired on or before 31 December 2026 keeps Bestandsschutz, meaning it stays in the existing Paragraph 23 system with the one-year holding period and can still be sold tax-free after twelve months, whenever that sale happens. Only assets acquired after 31 December 2026 fall into the new regime. Every professional analysis we checked agrees on this date and on the grandfathering, and it is the single most consequential planning fact in the draft: a purchase made in December 2026 and a purchase made in January 2027 would be taxed under two different systems for the rest of their lives. Note also that the acquisition date is what counts, not the sale date, so a 2026 coin sold in 2030 is still a 2026 coin.
The 50 percent substitute basis, and why it is not 30
German capital income tax already has a mechanism for this problem. When you transfer securities between banks and the receiving bank has no usable acquisition data, Paragraph 43a EStG lets it apply a substitute assessment basis of 30 percent of the proceeds. The crypto draft sets the equivalent figure at 50 percent of the total sale proceeds. Ingo Heuel, a tax attorney at LHP Group quoted by Blocktrainer, has criticised the gap publicly, and the draft text does not explain why crypto should carry 50 when securities carry 30. This is also where reporting on the story has been unreliable: at least one German advisory blog describes the crypto figure as 30 percent, apparently reading across from the existing securities rule. The professional analyses that quote the draft language directly, including Der Betrieb and the specialist firm Ruge Fehsenfeld, say 50 percent of the Veraeusserungserloes. A German tax lawyer quoted by TokenPost has separately said the 50 percent number is not final.
It is a withholding, not a verdict
The framing of "a 50 percent crypto tax" that circulated in the last week is wrong, and the distinction is worth understanding because it changes what you should do about it. The 50 percent is a substitute basis for the tax deduction at source, not a legal fiction about how much profit you made. It is the number the platform uses when it has nothing better. You can prove your actual acquisition cost in your annual return, and an excessive deduction is corrected in the assessment procedure. So the cost of having no records is not a permanent 26.375 percent on half your proceeds. It is a cash-flow cost plus a filing obligation: money leaves your account at the point of sale and comes back, if it comes back, after you file and the Finanzamt processes it. For anyone selling in size that can be a large sum sitting with the tax office for the better part of a year.
The withholding itself does not start until 2028
The substantive rules would apply from 1 January 2027, but automatic tax deduction by crypto service providers is scheduled to begin on 1 January 2028, giving platforms a technical transition year. For disposals in 2027 the tax would therefore run through your annual return in the ordinary way. That gives you more than a year to assemble acquisition records before any platform starts applying a default in your place.
Staking and lending move too
At present, income from staking and lending is taxed in Germany as Einkuenfte aus sonstigen Leistungen under Paragraph 22 Nr. 3 EStG, with its own annual threshold of 256 euros. Under the draft, ongoing returns from Tauschkryptowerte, including income from making coins available and passive staking, would be reclassified as capital income under Paragraph 20 EStG and taxed at the same 25 percent. Loss offsetting moves with it: losses would leave the narrow ring-fence of Paragraph 23, where crypto losses can only meet crypto and other private sale gains, and enter the Paragraph 20 Abs. 6 offsetting pool. The draft as circulated does not open up offsetting crypto losses against share gains.
A worked example
Take an investor who buys 0.5 BTC on 10 March 2026 for 30,000 euros and another 0.5 BTC on 10 March 2027 for 35,000 euros, then sells both on 20 June 2028 for 50,000 euros each. The 2026 lot was acquired before the cutoff, so it stays under Paragraph 23. It was held for more than one year, so its 20,000 euro gain is tax-free and the tax is zero. The 2027 lot falls under the new regime, where the holding period is irrelevant. Its gain is 50,000 minus 35,000, so 15,000 euros, and at 26.375 percent the tax is 3,956.25 euros. Same coin, same sale day, two completely different outcomes. Now add the records problem. Suppose the 2027 lot was held in self-custody and moved to a German exchange shortly before the sale, so the platform has no acquisition data. The deduction base becomes 50 percent of the 50,000 euro proceeds, so 25,000 euros, and the amount withheld is 26.375 percent of that, which is 6,593.75 euros. The investor actually owes 3,956.25 euros, so 2,637.50 euros has been overwithheld and has to be reclaimed on the return. The worse version is the 2026 lot arriving from self-custody with no records: the platform assumes an acquisition after 31 December 2026, withholds the same 6,593.75 euros, and the correct answer was zero.
This is a draft, not law
Nothing described above is in force. What exists is a Referentenentwurf from the Federal Ministry of Finance, which went into internal government coordination in early September 2026 and became publicly visible in the days after. A Referentenentwurf is the earliest formal stage of German tax legislation. It still needs to clear cabinet, then win majorities in the Bundestag and the Bundesrat, and the crypto provisions can be rewritten or dropped at any of those points. Coverage of tax proposals has a habit of describing drafts as settled law, so it is worth stating plainly: for the 2026 tax year the one-year holding period under Paragraph 23 EStG applies exactly as before, and it will apply to your 2026 return. The Finance Ministry projects about 160 million euros of additional revenue in 2028 from the change. Longer-range projections differ between sources, so we are not quoting them.
What to do before 31 December 2026
Two things, and they are both unglamorous. First, if the draft survives in anything like its current shape, a purchase made in 2026 is worth materially more after tax than the same purchase made in January 2027, because it carries a permanent exemption after twelve months that the later coin never gets. That is a reason to understand the date, not a reason to buy anything. Second, and this applies whatever happens to the bill, export and keep your acquisition records now: dates, quantities, prices and the wallet or exchange each lot came from. The 50 percent substitute basis only bites when nobody can establish what you paid. Coins that have been sitting in self-custody for years, that have moved between wallets, or that came off an exchange which has since shut down, are precisely the ones where that history is hardest to reconstruct later, and the burden of proving it will be yours.
How Taxxy handles it
Taxxy implements the law as it stands today, not the draft. German disposals run through Paragraph 23 EStG: the one-year test is a calendar comparison rather than a 365-day count, so a sale on the anniversary of the purchase is still inside the period, which matches the civil law reckoning and avoids the leap-year error. Cost basis is FIFO tracked per wallet and symbol, following the walletbezogene Betrachtung in the BMF circular of 6 March 2025. The Freigrenze is applied at 1,000 euros from 2024 and 600 euros for 2020 to 2023, tested against gross gains rather than the net result, and treated as a threshold rather than an allowance, so hitting exactly 1,000 euros makes the whole amount taxable. Staking, lending, mining and airdrop income is valued at receipt and reported separately under Paragraph 22 Nr. 3 with its own 256 euro threshold. Output maps to Anlage SO, Zeilen 45 to 51 and 58. Two limits worth stating: the Leistungen income block is computed but is not written onto the bundled Anlage SO template, so staking figures come through the fallback report rather than the filled PDF, and loss carry-forward across years is not yet implemented, so each year is calculated on its own. Nothing in Taxxy applies the 25 percent flat rate, the 50 percent substitute basis or the 2027 cutoff, because none of those is law.
A note on sources
We could not reach the Bundesfinanzministerium text directly during this review: bundesfinanzministerium.de served bot-protection responses to our requests, so every figure here comes from secondary sources rather than the ministry’s own publication, and you should treat the draft language as reported rather than as read. The 25 percent rate, the 26.375 percent effective rate including the solidarity surcharge, the 31 December 2026 cutoff and the grandfathering of earlier purchases are reported consistently by the specialist tax firm Ruge Fehsenfeld, Ecovis KSO, steuertipps.de, the professional publication Der Betrieb, GTK Steuerberater and CoinDesk. The 50 percent substitute assessment basis and its status as a correctable deduction at source come from Der Betrieb, Ruge Fehsenfeld, GTK, steuertipps.de and Blocktrainer, which quotes tax attorney Ingo Heuel. The 1 January 2028 start for automatic withholding comes from GTK and extraetf. The current 1,000 euro Freigrenze and the 256 euro threshold for staking income are confirmed by Ruge Fehsenfeld and kleinstb.de. We have deliberately left out the revenue projections for 2029 onward, because CoinDesk and extraetf report different figures, and we have not given a precise date for the draft entering coordination, because sources give 8 and 9 September 2026. This article is general information, not tax advice. The bill is a draft and may change or fail entirely, so speak to a qualified German Steuerberater before making decisions based on it.